If you're going to receive a settlement following an accident, you may be interested in understanding a structured settlement better. When you take a settlement, you typically agree to stop pursuing litigation against the defendant. Then, you will begin receiving compensation. Most of the time, people choose to have settlements paid in a lump sum or in a structured settlement.
With a structured settlement, you'll receive compensation over the course of several years. This can be helpful if you have a life-long condition that needs ongoing treatment, since you'll continue to receive funds over the course of the settlement period.
There are some benefits and downsides to a structured settlement. It can help you with your taxes, because settlements are considered to be tax free in the United States, but punitive damages could be taxed, just as interest could. Consider discussing this with your attorney before you agree to a structured arrangement.
You'll receive payments over time, which can be a good thing if you have an injury that is stable. However, if you expect to have future medical expenses or want to invest the funds long-term, then a lump-sum arrangement may be better for you.
Lump-sum payments can be combined with a structured settlement as a third kind of option. This could help you pay off the initial bulk of medical bills or help you recover a large amount of lost wages. Remember that a lump sum settlement is better protected against inflation, since your money can be invested to grow with the economy. A structured settlement is not adjusted for inflation or economic changes.
After your motorcycle accident, you may want to settle your case quickly. Our website has more on what to expect when you work with an attorney.